Amazon Slashes Prices for Kindle

Under the new price structure, customers can purchase the original Kindle for $279 with a 3G wireless connection capable of downloading material in the U.S. and 100 other countries. A Kindle with wireless that downloads only in the United States is available for $259 from Amazon.com’s online storefront. 

Amazon.com also announced that more than 85 U.S. and international magazines and newspapers would be available for download through the Kindle Store, including The New York Times, The Daily Telegraph (UK), The Washington Post and The International Herald Tribune. International customers will have access to some 200,000 English-language books.

While Amazon.com boasts a high degree of 3G connectivity for Kindle users in the continental United States, Japan, Europe, and much of Russia, China and South America, there are also a number uncovered countries including Mongolia, Vietnam, Sri Lanka, Cuba and most of Africa.

The move was seen as a good one by some analysts.

"These are smart moves for Amazon, as a good proportion of early Kindle adopters have been business travelers, who were frustrated by the inability to download new books outside the country," says Larry Fisher, an analyst with NextGen Research, ABI Research's emerging technologies arm, wrote in a research note e-mailed to eWEEK. "It also opens up the rest of the world as potential markets for Amazon and the Kindle, at a time when competing e-book readers have been trying to make the transition from other countries to the U.S. market."

The Kindle DX, which features a 9.7-inch screen in contrast to the original Kindle’s 6-inch version, still retails for $489.

Amazon.com attracted a substantial amount of buzz for the Kindle line, thanks at least in part to a series of high-profile launches earlier in 2009. On Feb. 9, Amazon CEO Jeff Bezos capped the introduction of the Kindle 2 at the Morgan Library and Museum in New York City by having Stephen King take the stage for a reading from the device.

That buzz translated into healthy sales for the Kindle. Although Bezos has declined to break out exact numbers, he suggested over the summer that Kindle-related sales have brought in 35 percent of his company’s book-related revenue.

As with all successful things, however, competition inevitably arises. Sony remains the online retailer’s arguably biggest opponent in the space, marketing two e-readers in August with price points of $199 and $299 seemingly designed to undercut the Kindle's pricing.

In addition, smaller companies plan on retailing e-readers in coming quarters that mirror much of the Kindle’s functionality. Plastic Logic, for example, plans on releasing a device with a larger screen than the Kindle DX and a wireless broadband connection via the AT&T 3G network. That e-reader will be aimed at the business market, with functionality that will allow it to download and display Microsoft Word, PowerPoint and PDF documents.

Amazon.com has also wrestled with the controversy erupting from its decision over the summer to delete copies of George Orwell's "Animal Farm" and "1984" from the e-readers' archived items library. In defending that move, Amazon.com issued a statement on July 17 explaining that the books had been pulled because their e-publisher did not hold the rights.

However, readers remained vocal about their displeasure, leading Bezos to offer a personal apology on the Kindle site: "Our 'solution' to the problem was stupid, thoughtless and painfully out of line with our principles."

Amazon.com also had to settle a related lawsuit leveled against it by a Michigan student and other plaintiff, who argued that the deletion of "1984" from their e-readers was illegal. As part of the settlement, Amazon.com stated that it would retain the right to remotely delete works from its users’ libraries under specific circumstances, including a legal order to delete or modify a file.

The Kindle's biggest competition, though, could potentially come from Apple and its much-rumored tablet PC, likely to be released sometime in early 2010. The latest unconfirmed scuttlebutt has Apple approaching various media companies in order to explore porting content onto such a device, which could open the door to Apple selling digital books or other media through the iTunes store.

Although Apple's tablet PC and its related ecosystem are much-speculated and little-confirmed, Amazon.com’s price reduction could be an attempt to make a $279 e-reader more appealing when eventually put head-to-head in the digital-book space against a $700-$900 multitouch device.